UT (Tax & Chancery) UT/2023/000050 - [2025] UKUT 00123 (TCC)

Arranged and received commissions;

Advised customers to invest in P6 knowing it was not suitable;

Falsified P6 application forms;

Advised and persuaded customers to transfer out of the British Steel Pension Scheme (BSPS) when he knew it was not in their best interests;

Wrote suitability reports to create the false impression that he had provided suitable advice;

Failed to disclose the existence of exit fees;

Knowingly allowed two people to provide pensions advice without being approved persons;

Dishonestly misled the FCA and the Insolvency Service;

Recklessly allowed the destruction of relevant evidence (i.e. the website and emails).

(a)-(c) He accepts that he received commissions but says that it was not done with an intention to act without honesty or integrity. (Mr Reynolds did not elaborate on this in his application, but in the April Decision I recorded my understanding of his position as being that he accepts that the commissions were not allowed but says that he did not structure how they were received to conceal this and he submits that others were paid in the same way, and he believed that the Authority knew that Greyfriars was paying commissions and did not object to it.) As regards (b) and (c), Mr Reynolds says that he has maintained from the outset that the business model and risk profile of P6 and way the forms were completed were standardised and as advised to him. To prove this, Mr Reynolds intends to obtain evidence from Greyfriars and all the firms that advised on P6. He says that this could be done by going directly to the firms involved, which would take a very long time. However, he says that the Authority already has all this evidence. Therefore, by gaining permission from the relevant companies, he will be able to gain access to those files and prove these points. If necessary, he can add statements from relevant people at those companies, all of which will highlight (he says) that while he may have been foolish and negligent in believing what he was told, he did not act dishonestly or without integrity. He says that he was not alone in making these mistakes. This evidence will show that he made every effort to obtain information and guidance about the investments he was recommending and accepted what another regulated firm and its employees were telling him.

(d)-(e) Mr Reynolds intends to obtain all the files of Active Wealth’s BSPS clients from the liquidator. He says that, within the factfinds from those files, each client outlined the reasons why they were considering transferring out of BSPS. These documents were signed by the clients. He will show that the advice given addressed the needs of the clients. Therefore, he says, to suggest that his advice was not in their best interests or to assert that he ‘doctored’ the suitability reports will be shown to be simply wrong. The suitability reports were completed to provide an accurate record of the discussions with clients and the advice given. Having access to those files will enable him to prove this point. The advice given orally to clients was reflected in the contents of the suitability reports issued to them. Also, Mr Reynolds intends to compare his reports with the template report obtained from the compliance advisor firm, Simplybiz, regarding advice on defined benefit pensions at the time Active Wealth started trading, and he will show that the specifics varied to reflect the circumstances of each individual client, including their financial position, attitude to risk and objectives. He will also obtain a statement from the independent compliance consultants he used regarding their opinion and advice on the structure of suitability reports. He also intends to approach the FSCS to find out why calculations of loss for some clients who have complained more recently show zero shortfalls. This would help to prove that, despite the Authority’s statements of severe detriment, the current fund values are more than needed to provide comparable benefits to those which would have been available had the clients stayed in BSPS. This is (he says) even more the case when these investments are compared to the BSPS ‘2’scheme that was replacing the original BSPS at the time but with much lower benefits. This again would prove that the transfer was suitable, based on the wants and needs of the client, shown in the factfinds, and led to no financial detriment. Mr Reynolds highlights that the Authority had files for many months without stating what was wrong in the process. Also copies of the suitability reports were sent to professional indemnity insurers when obtaining insurance and they also did not raise any issues. That aside, if the process was wrong, it was not done intentionally. At all times Mr Reynolds says that his objective was to achieve the wants and needs of clients.

Mr Reynolds will seek to obtain files from the liquidator of Active Wealth which show will show the document issued to clients that sets out the potential exit fees. It will also show how many clients this document was issued to. He will also obtain client policy statements from the fund provider that show that the exit fee had been waived in the past and for which clients. The early exit fee only commenced after a run on the funds which was occasioned by social media activity.

Mr Reynolds says that he can obtain statements from both persons referred to confirming that they did not give regulated advice. By obtaining the client files and comparing those files to the list of clients that the Authority says were advised by the two persons, Mr Reynolds says that he will be able to show that the advice was given to the clients by authorised members of Active Wealth. He also points out that other introducer firms visited clients to help complete factfinds and collect documents. Introducers helped with the sales process of Active Wealth, including completing factfinds and obtaining and passing on documentation both from and to clients. None of them gave regulated financial advice, as is accepted by the Authority, and neither did the two persons referred to by the Authority. The files obtained from the liquidator of Active Wealth will prove this. In a case against one introducer, brought by the Insolvency Service, at no point was the role of the introducer with Active Wealth shown as constituting advice being given by that introducer to clients rather than by Active Wealth advisers. The process was the same for the two people in question here.

Mr Reynolds says that he did not mislead either the Authority or the Insolvency Service but attempted to answer the questions put to him. He answered the questions put to him openly and honestly at a time when great pressure was being put on him by various government authorities, the press, social media, and client threats.

This again will be proved to be wrong by obtaining a statement from the person who owned the domain. This will show that at most Mr Reynolds was negligent in cancelling the subscription without knowing that all previous emails would be lost.